PBR also maintains its $15.1B asset sale target for the two years through the end of 2016, and plans to raise an additional $19.5B from divestments in 2017-18.
Advertisement
It is the first management plan of the company’s new president Pedro Parente, who was appointed to the position by President Michel Temer – the plan focuses on reducing the company’s debts.
Parente’s efforts are complicated by oil prices at some of their lowest levels in a decade, a corruption scandal that has undermined investor confidence and huge losses on money-losing refineries and domestic fuel subsidies.
Petrobras’s stock rose 2.68 per cent in afternoon trading in Sao Paulo. The stock established a negative trend of -5.29% in last week and indicated fall of -9.77% in previous month.
Brazilian oil giant Petrobras (PBR) is cutting back again.
The reduced capital investment will surely lower the future output.
Not all of Petrobras’ savings will come out of exploration and production spending.
Other media reports said Petrobras was also trying to sell stakes in the other mills, but the company never confirmed this.
While investment cuts were bigger than analysts expected, production targets were largely unchanged.
Petrobras’s business plan calls for increasing oil production from 2.62 million barrels per day (bpd) to 3.41 million bpd by 2021.
The company expects to produce 2.77 million bpd in 2021.
Total output of domestic and worldwide oil and natural gas equivalent is expected to rise to an average of 3.41 million bpd in 2021, 19 percent more than the 2.84 million bpd produced in August.
“The new five-year business plan is, in our view, the most important trigger for Petrobras stocks in the short term”, Itau BBA analysts Diego Mendes and Andre Hachem said in an email to Bloomberg before the plan was released.
In the past 14 years Petrobras has met its annual oil output target only once, in 2015.
A former Petrobras board chairwoman, she built up Petrobras during a commodities boom only to see her plans unravel along with almost $250 billion of shareholder value.
Advertisement
Petrobras projects that the price per barrel of Brent crude, the European benchmark, will be $48 next year, rising to $56 in 2018, $68 in 2019 and $71 in the 2020-2021 period. The plan expects the USA dollar to be worth an average of 3.55 reais in 2017, strengthening to 3.71 reais in 2021.
